Investment Rating - The report maintains a "Recommended" rating for the pharmaceutical industry [5] Core Insights - The underlying logic of the current pharmaceutical industry era is innovation and international expansion, with a focus on innovative drugs and technology-driven sectors [2][3] - The report highlights the strong performance of the CRO market and suggests a dual investment strategy focusing on both "0 to 1" technology innovation and low-position stocks [2][3] - The report emphasizes the ongoing trend of BD (Business Development) transactions in innovative drugs, with significant growth expected in 2026 [4][15] Summary by Sections 1. Key Events in the Pharmaceutical Industry During the Spring Festival - Innovative drug BD transactions have seen a strong start, with significant overseas development and registration progress for key products [13][14] - The total amount of BD transactions for innovative drugs in China for 2026 has already surpassed one-third of the total for 2025 [15] - The revision of the National Essential Medicines List Management Measures may signal changes in the essential medicines directory [28] 2. Pharmaceutical Market Review and Hotspot Tracking - The pharmaceutical sector's performance was relatively weak, with a weekly decline of 0.81%, ranking 20th among all industries [34][38] - The total trading volume for pharmaceuticals was 401.12 billion yuan, accounting for 3.83% of the total market, below the historical average of 7.09% [55] - The report notes a rising valuation level for the pharmaceutical industry, with a PE ratio of 29.25, which is below the historical average [52] 3. Stock Performance Review - The report lists the top-performing stocks, including Dongyangguang and Zhendemedical, while highlighting the underperformers like Huayuan Biology and *ST Sailong [58][59]

Group 1 - In 2025, China's foreign trade showed strong resilience, with total exports reaching a historical high, growing by 5.5% year-on-year, despite a complex external environment [1][57] - China's trade surplus exceeded $1 trillion for the first time, marking a significant increase of 19.8% year-on-year [1][57] - The net export of goods and services contributed 1.64 percentage points to GDP growth, the second-highest level since 2007, only behind 2021 [3] Group 2 - The diversification of external demand has strengthened, with emerging markets compensating for the decline in exports to the US, which fell by 19.79% year-on-year [6] - Exports to ASEAN, Africa, and the Middle East saw significant growth rates of 25.9%, 13.64%, and 9.7% respectively, contributing positively to the overall export scale [6] - The share of US exports in China's total exports decreased by 3.53 percentage points to 11.15% [6] Group 3 - The product structure of China's foreign trade is shifting towards higher value chains, with high-end products like electrical machinery, machinery, automobiles, and ships being the main export drivers [8] - Traditional light industrial products such as furniture and toys have seen a decline in export scale due to tariff friction and industrial chain relocation [8] Group 4 - The restructuring of global supply chains is creating significant opportunities for Chinese companies, with a notable increase in the number of Chinese enterprises establishing production capacities abroad, reaching 229 in 2025, nearly doubling from 2024 [18] - ASEAN, Mexico, and India are the primary destinations for Chinese production capacity outflows, with ASEAN covering a wide range of industries [18] Group 5 - The AI expansion cycle is a core focus in the Chinese capital market, with significant growth expected in AI computing hardware, supported by macro investment scales and healthy balance sheets of major tech companies [29][30] - The capital expenditure of major cloud service providers is projected to increase significantly, reflecting strong demand for AI computing [35] Group 6 - Cultural and technological value output is becoming a major trend for Chinese enterprises going abroad, with significant growth in IP exports and innovative products in sectors like gaming and new dining [39][41] - The Chinese innovative pharmaceutical sector is increasingly integrated into the global supply chain, with more products commercialized in the US and Europe [41] Group 7 - Key sectors with strong overseas expansion opportunities in 2026 include new energy (batteries, grid equipment), machinery, TMT (technology, media, telecommunications), and innovative pharmaceuticals [46] - The gaming industry is also highlighted for its potential, with significant overseas revenue growth expected [49]

Company Situation - The company completed a general authorization placement of 58.4408 million new H-shares in January 2026, raising approximately HKD 1.319 billion, with a placement price of HKD 22.82, reflecting an 8.5% discount to the previous closing price. The funds are intended for laboratory and production facility construction, debt repayment, and working capital supplementation, which may impact the equity structure and short-term liquidity [2] Performance and Operating Conditions - The company announced on January 13, 2026, that it expects total revenue for 2025 to be between RMB 13.872 billion and RMB 14.24 billion, representing a year-on-year growth of 13% to 16%. However, the net profit attributable to the parent company is expected to decline by 6% to 10% year-on-year, primarily due to a decrease in non-recurring gains and losses. The net profit excluding non-recurring items is projected to increase by 36% to 41%, indicating an enhancement in the profitability of the main business [3] Industry and Risk Analysis - The CXO industry is experiencing intensified competition, with domestic leaders such as WuXi AppTec and Kelun Pharmaceutical, as well as international companies like Lonza, accelerating their market presence. This competitive landscape may exert pressure on the company's market share and pricing strategies. The company needs to address these challenges through capacity release and strategic acquisitions, such as the acquisition of Wuxi Bai'ao in November 2025 [4]

Investment Rating - The report indicates a positive outlook for the pharmaceutical sector, particularly for innovative drugs and companies expected to reach profitability in 2025 [1][9][15]. Core Insights - The innovative drug sector is anticipated to see significant growth due to the commercialization of core products and contributions from business development (BD) revenues, with companies like BeiGene, Innovent Biologics, and others expected to achieve profitability [1][9]. - The Pharma sub-sector is projected to experience a revenue growth rate of 15-20% in 2025, with notable companies such as Hansoh Pharmaceutical and China Biologic Products leading this growth [2][10]. - The CXO sector is also expected to report strong performance, with companies like WuXi AppTec forecasting substantial revenue and profit increases [3][11]. - The medical services sector is currently valued at historical lows, with a projected revenue growth of 13% for Genscript Biotech, highlighting the importance of monitoring industry changes [4][12]. Summary by Sections Innovative Drugs - Companies expected to achieve profitability in 2025 include BeiGene, Innovent Biologics, and others, driven by increased commercialization and BD revenues [1][9]. Pharma - Revenue growth of 15-20% is expected for leading companies such as Hansoh Pharmaceutical and China Biologic Products, with a significant boost anticipated for 3SBio due to a major BD deal with Pfizer [2][10]. CXO - WuXi AppTec is projected to achieve approximately 454.56 billion RMB in revenue, reflecting a year-on-year growth of about 15.84%, with adjusted net profits expected to rise significantly [3][11]. Medical Services - Genscript Biotech is expected to see a revenue increase of 13% in 2025, emphasizing the need to focus on overseas business expansion and AI integration in traditional medicine [4][12].

Investment Rating - The report maintains a positive outlook on the pharmaceutical sector, indicating an "Overweight" rating for the industry, suggesting it will outperform the overall market [1]. Core Insights - The report highlights that the commercialization of innovative drugs, combined with licensing income, is expected to lead to profitability for several companies in 2025, including BeiGene, Innovent Biologics, and others [1][9]. - The Pharma sub-sector is projected to achieve a revenue growth rate of 15-20% in 2025 for companies like Hansoh Pharmaceutical and China Biologic Products, with a significant revenue increase expected for 3SBio due to a major business development deal with Pfizer [2][10]. - The CXO sector is also expected to show strong performance, with companies like WuXi AppTec forecasting a revenue increase of approximately 15.84% and a net profit growth of about 102.65% in 2025 [3][11]. - In the medical services sector, the report notes that valuations are at historical lows, with a projected revenue growth of 13% for GuoShengTang in 2025, emphasizing the importance of overseas business expansion and AI integration in traditional Chinese medicine [4][12]. Summary by Sections Innovative Drugs - The report anticipates that several innovative drug companies will reach profitability in 2025 due to increased commercialization and business development income [9][15]. Pharma - The Pharma sub-sector is expected to see a revenue growth of 15-20% in 2025 for key players, with 3SBio projected to achieve over 100% growth due to a significant partnership with Pfizer [2][10]. CXO - WuXi AppTec is expected to report a revenue of approximately 454.56 billion RMB in 2025, with a net profit growth of around 102.65% [3][11]. Medical Services - GuoShengTang is projected to have a revenue growth of 13% in 2025, with a focus on overseas acquisitions and AI applications in traditional medicine [4][12].

Group 1 - Norges Bank reduced its stake in 康龙化成 (03759) by 1.8342 million shares at a price of 20.4681 HKD per share, totaling approximately 37.5426 million HKD [1] - After the reduction, Norges Bank's latest holding amounts to approximately 20.7372 million shares, representing a holding percentage of 5.88% [1]

Group 1 - Norges Bank reduced its stake in Kanglong Chemical (300759) by 1.8342 million shares at a price of HKD 20.4681 per share, totaling approximately HKD 37.5426 million [1] - After the reduction, Norges Bank's latest shareholding stands at approximately 20.7372 million shares, representing a holding percentage of 5.88% [1]

Group 1 - Norges Bank reduced its stake in Kanglong Chemical (03759.HK) by selling 1.8342 million shares at an average price of HKD 20.4681 per share, amounting to approximately HKD 37.5426 million [1] - Following the sale, Norges Bank's total shareholding decreased to 20.737224 million shares, representing a reduction in ownership from 6.40% to 5.88% of the total issued shares [1]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2026年1月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 康龍化成（北京）新藥技術股份有限公司 (於中華人民共和國註冊成立的股份有限公司） 呈交日期: 2026年2月4日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | H | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 03759 | 說明 | H股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 301,537,125 | RMB | | 1 | RMB | | 301,537,125 | | 增加 / 減少 (-) | | | 58,440,762 | | | | RMB | | 58,440,762 | | 本月底結存 | | | 359,977,887 | ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2026年1月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 康龍化成（北京）新藥技術股份有限公司 (於中華人民共和國註冊成立的股份有限公司） 呈交日期: 2026年2月4日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | H | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 03759 | 說明 | H股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 301,537,125 | RMB | | 1 | RMB | | 301,537,125 | | 增加 / 減少 (-) | | | 58,440,762 | | | | RMB | | 58,440,762 | | 本月底結存 | | | 359,977,887 | ...